Why the Price Better Be Right in California

They say you get what you pay for, but in some transactions – particularly tailoring, hair-cutting, and dry-cleaning – the customer gets the same thing as others who pay less. In fact, some customers don’t mind that at all. Ladies’ Nights and other schemes to increase the presence of women in an establishment are probably more popular with men than with women. They’re also illegal. That’s because California’s Gender Tax Repeal Act (GTRA) and Santa Monica’s Equal Pricing Ordinance (EPO) severely punish businesses that charge anyone, whether male or female, discriminatory prices because of that person’s gender.

I. California’s Gender Tax Repeal Act

A. The Ban onGender-BasedPrice Discrimination

The GTRA prohibits a business from discriminating, with respect to the price of services of “similar or like kind,” against a person because of his or her gender.1 But that works both ways. The GTRA prohibits a business from charging a woman either a higher or lower price for a service because she is a woman. Thus, the GTRA prohibits a Hollywood club from offering free admission to women on “Ladies’ Nights” because such a discount disfavors men.2 Similarly, the GTRA would probably prohibit a bar from trying to reel in female customers by offering free admission to anyone who wears a short skirt.3

In fact, a bar might violate the GTRA even if it offers free admission to a man for wearing a skirt – the reason being that the GTRA prohibits price discrimination based on “gender,” not “sex.” The concept of “gender” goes beyond one’s biological sex to embrace the twin concepts of “gender identity” (i.e., the gender the person identifies with) and “gender expression” (i.e., the person’s gender-related appearance and behavior).4 Thus, the GTRA would probably prohibit a business from charging both men and women less for wearing skirts, as doing so would discriminate against men who have a stereotypically male gender expression.

The GTRA doesn’t prohibit a business from charging men and women different prices in every instance. The GTRA lets a business charge men and women different prices if it “specifically” bases the prices on the “amount of time, difficulty, or cost” of providing them.5 For example, a hair salon might be able to charge a long-haired woman more to highlight her hair than the salon charges a man with a Marine haircut to highlight his hair. That’s because highlighting long hair takes more time and effort than highlighting short hair does. In reality, however, the salon isn’t basing the price difference on gender in the first place.

In some cases, the GTRA might allow genuine gender-based price differences to persist. For example, a business doesn’t violate the GTRA just by offering a Mother’s Day or Father’s Day discount, as long as the discount is available to both men and women.6 Likewise, the GTRA doesn’t necessarily prohibit a business from offering a free promotional service to women only.7 That’s because the GTRA only prohibits gender-based differences in prices. But whatever service the business offers women should be both completely worthless and unavailable to men at any price. Otherwise, the service is really a Ladies’ Night in disguise.

Businesses pay a steep price for price discrimination. The law provides that anyone who violates or aids in the violation of the GTRA will be liable for “each and every” offense for: (1) the actual damages; (2) up to three times the actual damages but no less than $4,000; and (3) any attorney’s fees that the court may determine court in addition to actual and statutory damages.8 Unfortunately, filing a lawsuit also comes with a price of its own. For a man to have standing to sue a nail salon for charging men more than women for a manicure, he must tender the price of the manicure.9 He doesn’t have to stick around for the manicure, however.

B. Notice Requirements for Three Kinds of Businesses

Consumers usually can’t tell if price discrimination exists unless they can see a price list. The GTRA requires three kinds of businesses – tailors and other businesses providing aftermarket clothing alterations; barbers and hair salons; and dry cleaners and laundries – to: (1) “clearly and conspicuously” disclose to the customer in writing the pricing for each “standard service,” i.e., the 15 services that customers most frequently request that the business provide10; and (2) conspicuously display a visible sign containing the language of the GTRA and informing customers that a complete price list is available upon request.

The two “conspicuous notices” must comply with a battery of requirements. The price must be on display in an area conspicuous to customers, be in at least 14-point boldface type, clearly and completely display pricing for every “standard service” that the business offers, and be available in writing at the customer’s request. Similarly, the sign must be on display in a conspicuous place, be “clearly visible” to customers, and, in at least 24-point boldface type and capital letters, quote the GTRA’s prohibition on gender-based price discrimination and inform customers that a complete price list is available to them on request.

II. Santa Monica’s “Equal Pricing” Ordinance

The City of Santa Monica has adopted a price discrimination ordinance of its own: the EPO. Under the EPO, “[n]o seller of goods or services, including a person who holds a Santa Monica business license.., may discriminate, with respect to the price charged for goods or services, against a person because of the person’s gender.”11 The EPO thus extends the GTRA’s prohibition of gender-based differences in the price of services to gender-based differences in the price of goods. In other words, a Santa Monica bar may not charge women less for either admission or for drinks than it charges men.

The price better be right in Santa Monica. Every person who violates the EPO is guilty of a misdemeanor punishable by a fine of up to $500, imprisonment in the county jail for up to six months, or both.12 Each day that a violation of the EPO occurs is a separate offense.13 Thus, a business owner who violates the EPO every day for a year might have to pay a $182,500 fine and serve a 180-year jail sentence. Moreover, any citizen can prosecute a civil action to enforce the EPO, and in any such action, obtain any legal and equitable relief, including the recovery of actual and punitive damages and reasonable attorneys’ fees, as the law may impose.14

The EPO differs from the GTRA in several ways. First, the EPO doesn’t require “conspicuous notice.” Second, the EPO doesn’t require a plaintiff to suffer actual damages to sue.15 That could mean that she doesn’t have to tender the price to allege price discrimination. Third, the EPO requires a plaintiff to give a business written notice of a violation before she can sue.16 The business will then have 30 days to correct the violation. If the business fails to do so within 30 days of its receipt of the notice, the plaintiff will be able to sue for a civil penalty of $1,000.17 That’s a big penalty for trying to squeeze a few extra bucks out of someone.

Ben Rothman, Esq.

Ben Rothman is a Los Angeles-based attorney practicing in the areas of personal injury, employment, and workers' compensation on a "no recovery, no fee" basis. Call him at (424) 465-2948 for a free, no-obligation consultation.

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